Author Topic: Ethanol regs push us into “the blend wall”  (Read 1805 times)

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Offline Rapunzel

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Ethanol regs push us into “the blend wall”
« on: March 10, 2013, 05:02:20 am »
http://hotair.com/archives/2013/03/09/ethanol-regs-push-us-into-the-blend-wall/

Ethanol regs push us into “the blend wall”
posted at 3:31 pm on March 9, 2013 by Jazz Shaw

Filed under the “we hate when we turn out to be right” category, domestic energy producers are facing some tough choices in the coming months thanks for a one – two punch of ethanol and government regulations. A combination of the drought this summer wiping out a fair portion of the corn crop and an unfunded mandate scheme by the federal government have resulted in there not being enough affordable ethanol for producers to blend into E-10 fuel. When producers can’t meet the minimum amount of “renewables” required by Uncle Sam, they have the choice of using RINs (Renewable Identification Numbers issued by the government) instead. Since the RINs are able to be traded, this makes them into a new sort of commodity exchange system, and like any other, when supply goes down, prices go up.

    Prices of renewable fuel credits, needed by refiners to comply with the nation’s Renewable Fuel Standard, have skyrocketed over the past few months, an indication to some that the dreaded “blend wall” is close.

    The price for the traded Renewable Identification Numbers (RINs) for corn-based ethanol have jumped from a trading range of about 2-3 cents/RIN to as much as 79 cents/RIN.

    Trading for 2013 ethanol RINs Tuesday started the day at 75 cents/RIN and got as high as 79 cents/RIN before dropping back down to 75 cents/RIN by assessment time. Platts assessed RINS Tuesday at 75 cents/RIN.


The “blend wall,” as it’s known in industry circles, is the point where there is more gas to be blended than ethanol to use. They’ve known this day was coming for some time, but most analysts thought it would take a few years longer. The drought, as mentioned above, has accelerated the timetable. This leaves refiners with only a few choices, and none of them are good for you.

    If RIN prices move too high, refiners will be left with three options that won’t be “popular,” said Jason Bordoff, Professor of Professional Practice in International and Public Affairs Director, Center on Global Energy Policy, at Columbia University, at the IHS CERAWeek conference. The options include passing the cost of RINs to consumers through higher retail prices, exporting products, or lowering refinery utilization rates.

Bloomberg has more on this, charitably translated into normal English for the layman. The key figure to watch here is the fact that we are currently projected to only have an available supply of 12.3 billion gallons of ethanol available for blending in 2013. To keep up with government mandates under the Renewable Fuel Standard, 13.8 billion gallons would be needed.

The long and the short of it is that they can either sell their fuel elsewhere, charge more for it to cover the cost of the RINs or produce less. (Which also drives up prices.) Either way, you lose and the EPA wins.
�The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.� G Washington July 2, 1776

Oceander

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Re: Ethanol regs push us into “the blend wall”
« Reply #1 on: March 10, 2013, 05:11:08 am »
Meanwhile, we're turning increasingly scarce food crops into fuel.  Go figure.  I thought liberals perferred people to material objects, but now they'd rather starve the third world just to feed their fantasies of a "green" fuel economy.

Offline Rapunzel

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Re: Ethanol regs push us into “the blend wall”
« Reply #2 on: March 10, 2013, 05:12:31 am »
Meanwhile, we're turning increasingly scarce food crops into fuel.  Go figure.  I thought liberals perferred people to material objects, but now they'd rather starve the third world just to feed their fantasies of a "green" fuel economy.

and ruining our cars and boats in the process, not to mention jacking up the price of food.
�The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.� G Washington July 2, 1776

famousdayandyear

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Re: Ethanol regs push us into “the blend wall”
« Reply #3 on: March 10, 2013, 05:28:20 am »
and ruining our cars and boats in the process, not to mention jacking up the price of food.

Every time I pump E-10 into my Subaru (which must last me for years to come), I know I'm destroying the engine.  There is one Ethanol Free station 20 miles one way.  So far, I haven't been willing to drive 40 miles RT--but may soon--before they shove E-15 down our throats.
These environ people are totally insane and they operate with autonomy.

Offline Rapunzel

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Re: Ethanol regs push us into “the blend wall”
« Reply #4 on: March 10, 2013, 05:33:55 am »
Every time I pump E-10 into my Subaru (which must last me for years to come), I know I'm destroying the engine.  There is one Ethanol Free station 20 miles one way.  So far, I haven't been willing to drive 40 miles RT--but may soon--before they shove E-15 down our throats.
These environ people are totally insane and they operate with autonomy.

I have a suburban with the large 8.1 engine.  Now I have to add the "Ethanol" additive when I fill up or I get the check engine light - (which is the vehicle emissions warning).... like you my car has to last......  yesterday when I was our my dogfood store I was talking to a couple in the store - he is a boat mechanic and the subject went to the high cost of repairs these days - he was telling me wht the replacement cost of just one fuel injector is these days (high) and the computer that runs the electronics retails for $7200......... talk about sending a cold chill down my spine..... yikes... he said this is one reason the marine industry is shrinking, fewer and fewer can afford the high repair costs in this economy without disposable income and now a person is more likely to look for an older boat with the older and easier to repair components and just fix it up... 
�The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.� G Washington July 2, 1776

famousdayandyear

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Re: Ethanol regs push us into “the blend wall”
« Reply #5 on: March 10, 2013, 05:39:26 am »
I have a suburban with the large 8.1 engine.  Now I have to add the "Ethanol" additive when I fill up or I get the check engine light - (which is the vehicle emissions warning).... like you my car has to last......  yesterday when I was our my dogfood store I was talking to a couple in the store - he is a boat mechanic and the subject went to the high cost of repairs these days - he was telling me wht the replacement cost of just one fuel injector is these days (high) and the computer that runs the electronics retails for $7200......... talk about sending a cold chill down my spine..... yikes... he said this is one reason the marine industry is shrinking, fewer and fewer can afford the high repair costs in this economy without disposable income and now a person is more likely to look for an older boat with the older and easier to repair components and just fix it up... 

Did the mechanic say anything about additives that may help keep repairs in check?  I have tried  a couple of products, but sometimes feel like it is just a "snake oil" promise.

Offline Rapunzel

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Re: Ethanol regs push us into “the blend wall”
« Reply #6 on: March 10, 2013, 05:58:52 am »
Did the mechanic say anything about additives that may help keep repairs in check?  I have tried  a couple of products, but sometimes feel like it is just a "snake oil" promise.

I moderate a Lake Powell-related website. This subject comes up frequently and yes. the Stabil for Ethanol; is rated high as is the Lucas Oil Ethanol product.  I use the Lucas Oil additive formulated for Ethanol.  Last month I had to go over to Bullhead City to the doctor. I filled up here and on the way home right before the turn off on I40 toward town the check engine light came on and stayed on... I stopped at Petsmart, still on.. had to go to Albertson's so I purchased Prestone Ethanol additive there as it was all they had -- I put it in while in the parking lot and then drove over to the Chevy dealer.. which was about a 8 min drive - turned the engine off and when the service person came out to look at it and we turned the engine on the light went out, the additive had worked its way through the system   Same thing happened the last time I went to California - filled up in CA, light came on right around Needles and when I got home and pulled the manual and saw what causes it I put in additive, next day since I had not driven it the light was still on so I went over to the dealer -- when they checked the light was out - the additive had worked through the engine.  Now I just add it each fill up. 

This is a huge, huge problem in boats because of the moisture that is naturally attracted from being on the water and last year people were reporting they were having to carry spare filters and change them frequently..   

A lot of boaters are starting to talk about using "Star-Tron" which is an enzyme that breaks down the sludge caused by Ethanol - remember Ethanol works like a solvent and all the varnish etc., it cleans out of the system clogs fuel filters, injectors, etc...  and BTW both times I had problems were moist, rainy days - ethanol is hygroscopic - which means it is attracted to moisture in the air which it then deposits in the fuel in the vehicle.   I have not tried it yet, but it is available at WalMart and I think I am going to try it next as there has been so much good buzz about Star Tron.

One other problem is the Ethanol is not added at the source (factory) it is added at the service station when they pump the fuel they then add in Ethanol so there is no scientific measure being done, it is reported that some people have been testing their fuel and finding much more than E10, etc., in their fill-ups.
« Last Edit: March 10, 2013, 06:14:59 am by Rapunzel »
�The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.� G Washington July 2, 1776

famousdayandyear

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Re: Ethanol regs push us into “the blend wall”
« Reply #7 on: March 10, 2013, 06:10:44 am »
Thanks for the info, Rap.  Will look for the Star Tron.  Cheers

Offline SouthTexas

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Re: Ethanol regs push us into “the blend wall”
« Reply #8 on: March 10, 2013, 03:30:22 pm »
and ruining our cars and boats in the process, not to mention jacking up the price of food.

Don't forget your small engines don't like ethanol either.  Found out you can buy two cycle pre-mixed gas without ethanol in it and it works wonders with the chain saw.   

You'd think in this part of the country we would not have to run our food for fuel, but alas, those of us that grew up shanghaiing casing- head gas right off the well head are just as screwed as the rest of you.